Alternative Dispute Resolution

January 1, 1995

January 1995

PROCUREMENT REFORM GUIDE

Alternative Dispute Resolution

n 1990, Congress passed the Alternative Dispute Resolution (ADR) Act to provide methods of resolving disputes that are less contentious and less expensive than traditional contract litigation, such as mediation and arbitration. The Office of Federal Procurement Policy has encouraged agencies to use ADR techniques as a means of reducing the amount of money and time spent resolving contract disputes through traditional litigation.

The Federal Acquisition Streamlining Act extends the 1990 ADR Act, which was to expire in 1995, to 1999. Agencies and vendors that choose not to use ADR techniques now are required to explain why in writing.

"Broad implementation of ADR means increased productivity because parties can focus more attention and resources on operations by minimizing diversions to the ancillary processes of resolving disputes," says MCI's Tim Long, chairman of the Council of Federal Information Technology, a trade association that has actively promoted alternative dispute resolution.

In a joint project last May with the Administrative Conference of the United States, OFPP secured pledges from 24 agencies to use ADR techniques. In addition, six agencies made specific promises to use ADR in 60 contracts valued at $1.4 billion. Since then, the Internal Revenue Service has pledged to use ADR for an additional contract worth $1.3 billion.

Of particular interest is the ADR technique known as partnering, in which contracting parties meet after awards have been made but before work has begun on a project to identify expectations and set goals. The meetings usually take the form of two-day workshops held in neutral retreat facilities.

The Army Corps of Engineers was the first federal agency to use partnering techniques five years ago. Not one of the 200 construction contracts the Corps has awarded since then has been litigated.

"Partnering enables contracting parties to prevent disputes by forming non-adversarial relationships," says Frank Carr, the Corps' chief trial attorney. "By sitting down at the start of a contract and developing a charter, parties can build trust and respect."